Jane Dotson
Florida's insurance market has been undergoing significant changes, with new laws and regulations being implemented to address various issues. The state has been known for its high insurance litigation rates, and recent reforms aim to reduce litigation and stabilize insurance rates. One of the key changes is the elimination of one-way attorney fees, where insurers no longer have to pay for the insured's legal fees if they win in court. The state is also enhancing the Office of Insurance Regulation's (OIR) authority and oversight, increasing accountability in the insurance market. Other changes include revisions to arbitration processes, mandatory reporting, and consumer protection measures. These changes are intended to improve the insurance landscape in Florida, particularly in response to challenges posed by severe weather events and an increase in hurricanes.
| Characteristics | Values |
|---|---|
| Name of the new insurance law | HB 939, also known as "Consumer Protections" |
| Date passed by the Legislature | May 2, 2024 |
| Date the changes take effect | July 1, 2024 |
| What it amends | Various statutes in the Florida Insurance Code |
| What it revises | Requirements in section 626.8796, Florida Statutes, relating to contracts that a public adjusting firm enters into with a policyholder in connection with a property and casualty insurance claim |
| What it requires | Public adjusting firms to specify their license number in contracts |
| What it changes | The method used to calculate attorney’s fees awarded by the courts |
| What it expands | The My Safe Florida Home Program to all Florida homes that meet specified criteria |
| What it prohibits | Assignment, in whole or in part, of any post-loss insurance benefit under any residential or commercial property insurance policy issued on or after January 1, 2023 |
| What it enhances | The Office of Insurance Regulation's (OIR) ability to conduct market conduct exams of property insurance companies following a hurricane, including examinations of Managing General Agents (MGAs) |
| What it provides authority to | The Financial Services Commission to adopt rules to administer provisions that require any insurer planning to non-renew more than 10,000 residential property insurance policies in Florida within a 12-month period to give the OIR at least 90 days' written notice |
| What it includes | A net retention amount and manner selected by the administrator, ratified by the governing body, and certified by a qualified actuary |
| What it eliminates | A requirement that the program retain a per-loss occurrence that does not exceed $350,000 |
| What it aids | Citizen's Property Insurance's ongoing depopulation efforts to reduce the number of policies |
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What You'll Learn
Changes to Citizens Property Insurance
Citizens Property Insurance, also known as Florida's insurer of last resort, has undergone changes as a result of a new bill that went into effect on July 1, 2024. The bill, HB 1503, allows surplus line carriers to take out policies from the state's Citizens Property Insurance Corp that are not primary residences or homesteaded properties, such as vacation homes.
Surplus line carriers are insurance companies that provide property insurance that other insurers don't typically cover in a particular market. These carriers can set their prices based on their risk modelling and don't need to get approval from the state's surplus lines office for regulation. As a result, their rates can be 50% to 100% higher than those of standard home insurers.
The changes to Citizens Property Insurance are expected to aid in the state's depopulation efforts, reducing the number of policies and the financial risk associated with a major hurricane. As of June 24, 2024, Citizens had more than 1.2 million policies, but the goal is to decrease this number to under 500,000 customers.
The private market is now healthier and has more capacity to take on risk, with eight new insurers approved to write business in Florida and another eight filing for rate decreases or flat rates. These changes are a result of legislative reforms passed in 2022 to address legal system abuse and assignment of benefits claim fraud.
The Florida Office of Insurance Regulation (OIR) has also played a role in strengthening Florida's property and casualty insurance market, with property insurance rate filings for 2024 showing a downward trend for the first time in years, indicating continued stabilization.
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New requirements for public adjuster firm contracts
Florida's insurance market has seen a series of changes and reforms in 2023 and 2024, with a focus on strengthening the property and casualty insurance market and enhancing consumer protection. One of the key pieces of legislation in this regard is House Bill 1611, which was signed by Governor DeSantis and took effect on July 1, 2024. This bill includes a range of provisions aimed at improving oversight and accountability in the insurance market.
One of the notable changes introduced by HB 1611 relates to public adjuster firm contracts. The bill revises the requirements for such contracts in section 626.8796 of the Florida Statutes. These revisions are designed to enhance consumer protection and ensure greater transparency in the claims process.
The new requirements specify that contracts between public adjuster firms and policyholders must include the license number of the public adjusting firm. This addition is intended to provide greater clarity and assurance to policyholders, enabling them to verify the legitimacy and credentials of the firm they are engaging with.
Additionally, HB 1611 also introduces changes to the "notice of property insurance claim" statute in section 627.70132 of the Florida Statutes. This revision establishes specific time frames within which a "loss assessment" claim must be made. The bill sets a deadline of three years after the date of loss for submitting a notice of claim for loss assessment coverage. This provision aims to streamline the claims process and promote timely reporting of losses.
Furthermore, the bill addresses surplus lines insurance and the role of surplus lines carriers. It allows these carriers to offer policies for properties that are not primary residences or homesteaded properties, such as vacation homes. This change provides more flexibility in the market and gives consumers additional options for insurance coverage. However, it's important to note that surplus line rates can be significantly higher than those of standard home insurers.
These updates to the insurance laws in Florida are part of a broader effort to strengthen the state's insurance market, enhance consumer protection, and address issues such as legal system abuse and claim fraud. The combination of these legislative reforms and the ongoing depopulation efforts is expected to contribute to the stability and health of Florida's insurance landscape.
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Revised disclosure and signature requirements for short-term health insurance
The state of Florida has passed a new insurance law, HB 939, which comes into effect on July 1, 2024. This law, entitled "Consumer Protections", amends various statutes in the Florida Insurance Code. One of the key changes made by HB 939 is the revision of disclosure and signature requirements for short-term health insurance.
The new law revises the requirements in section 627.6426 of the Florida Statutes, which relates to "short-term health insurance". Under the current law, short-term health insurance is defined as "health insurance coverage provided by an issuer with an expiration date specified in the contract that is less than 12 months after the original effective date of the contract and, taking into account renewals or extensions, has a duration not to exceed 36 months in total". HB 939 revises the current disclosure requirements and introduces a signature mandate for the purchase of such insurance.
The specific changes made to the disclosure requirements are not outlined in the sources. However, it is clear that the new law adds an extra layer of protection for consumers purchasing short-term health insurance. By requiring a signature for the purchase of short-term health insurance, the law ensures that consumers are aware of the terms and conditions of the policy and agree to them.
This change is part of a broader effort by the state of Florida to enhance consumer protections in the insurance industry. The new law also revises requirements related to contracts that a public adjusting firm enters into with a policyholder in connection with a property and casualty insurance claim. Specifically, the law now requires that such contracts specify the license number of the public adjusting firm.
These revisions to the Florida Insurance Code are designed to improve transparency and accountability in the insurance industry, ultimately protecting consumers from potential fraud or unfair practices.
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Changes to attorney's fees in lawsuits
Florida's new insurance laws bring significant changes to attorneys' fees in lawsuits, addressing concerns about rising insurance costs and the complex insurance market in the state.
One of the most notable changes is the revision to the method used to calculate attorneys' fees awarded by the courts. The new law disallows one-way attorney fees for several types of lawsuits, including those against surplus lines insurance companies and lawsuits to enforce an insurance policy. This change means that neither party can be awarded attorney fees in a property insurance claims lawsuit, and each party is responsible for paying their own attorney's fees. This shift is intended to reduce the financial burden on insurance companies and encourage more competitive pricing.
Additionally, the new laws amend various statutes in the Florida Insurance Code, including requirements for contracts entered into by public adjuster firms and disclosure and signature requirements for short-term health insurance. The bill, HB 939, entitled "Consumer Protections," was passed by the Legislature with the governor's approval on May 2, 2024, and the changes took effect on July 1, 2024. This bill also makes changes to the "notice of property insurance claim" statute, creating time frames for filing a "loss assessment" claim.
Another bill, HB 1503, which also came into effect on July 1, 2024, allows surplus lines carriers to offer insurance policies for properties that are not primary residences or homesteaded properties, such as vacation homes. This change is expected to contribute to the state's depopulation efforts by reducing the number of policies under Citizens Property Insurance, also known as Florida's insurer of last resort.
The changes to attorneys' fees in lawsuits are part of a broader effort to strengthen Florida's property and casualty insurance market, enhance consumer protections, and address issues related to legal system abuse and assignment of benefits claim fraud. These reforms aim to improve market stability, increase competition, and provide better protection for Florida's consumers.
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Increased accountability for the Office of Insurance Regulation (OIR)
Senate Bill 7052 and House Bill 1611 have increased accountability for the Office of Insurance Regulation (OIR) in Florida. The former includes provisions to increase the OIR's oversight of insurance companies in the state. For instance, if the OIR believes that a law has or may have been violated during an investigation, it must refer records and information to the relevant authorities and assist with the investigation. The bill also gives the OIR additional authority to conduct market conduct examinations of insurance companies 90 days following a hurricane if a certain level of consumer complaints and/or claims is reached. It outlines when the OIR must prioritise these examinations based on complaints related to the handling of claims and violations of law.
The latter bill, signed by Governor DeSantis, institutes additional consumer protections to ensure the OIR has the tools and authority necessary to maintain accountability within the market. It requires insurers and insurer groups to file a specified supplemental data report, including zip code-level data, on a monthly basis beginning January 1, 2025. It also prohibits insurers from canceling and non-renewing policies covering dwellings and residential properties damaged as a result of hurricanes or wind losses within 90 days after the property has been repaired.
Other recent changes to insurance laws in Florida include the passage of HB 939, entitled "Consumer Protections", which amends various statutes in the Florida Insurance Code, and HB 1503, which allows surplus lines carriers to take out policies from the state's Citizens Property Insurance Corp that are not primary residences or homesteaded properties, such as vacation homes.
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Frequently asked questions
There are several new insurance laws in Florida, including HB 939, which amends various statutes in the Florida Insurance Code, and HB 1503, which allows surplus lines carriers to take out policies from the state’s Citizens Property Insurance Corp that are not primary residences or homesteaded properties.
HB 939, or "Consumer Protections", amends various statutes in the Florida Insurance Code, including revisions to requirements in section 626.8796, relating to contracts that a public adjusting firm enters into with a policyholder in connection with a property and casualty insurance claim.
HB 1503 allows surplus lines carriers to take out policies from the state’s Citizens Property Insurance Corp that are not primary residences or homesteaded properties, like vacation homes. This will aid in Citizen’s ongoing depopulation efforts to reduce the number of policies.
